Finance panel should be guided by constitutional mandate: Kerala CM

Thiruvananthapuram, April 10 (IANS) Kerala Chief Minister Pinarayi Vijayan on Tuesday demanded the reframing of the terms of reference of the 15th Finance Commission which, he said, was necessary to save the federal structure of the Indian Union.

The Finance Commission — which delves into the financial relations between the Centre and states — should be guided more by its constitutional mandate than arbitrary terms of reference, Vijayan said in his inaugural address at the one-day workshop here.

The workshop was called by state Finance Minister Thomas Issac for his counterparts from southern states to express resentment against the Centre and to have a detailed review and critique of the terms of reference of the Finance Commission.

Finance Minister of Tamil Nadu and Telengana were conspicuous by their absence at the event.

“… (there is) a conspicuous bias in-built in the terms of reference of the new commission. It is widely feared that these terms framed by the Centre will prevent the panel from fulfilling its constitutional responsibility,” Vijayan added.

The Chief Minister said all states should appeal to the central government to reframe the terms of reference.

“The reframing of the terms of reference is imperative to strengthen the federal structure of the country and to reinforce its unity and integrity,” said Vijayan, a senior Communist Party of India-Marxist leader from Kerala.

Vijayan said the commission role assumes significance, given the fact that the Centre is given near monopoly over the right to mobilise resources.

“We are all aware that the terms of reference have created apprehension about the principles of fairness and equity in the distribution of national resources for development. The unity of India can be preserved only if there is real fairness and equity in devolution of financial powers and resources to the states by the Centre,” the Chief Minister added.

Vijayan expressed reservation over the Financial Commission proposal for “measurable performance-based-incentives” which he claimed was an attack on the federal structure of the Indian state.

“Such terms of reference, we fear, might end up altering the commission’s status from a constitutional authority entrusted with devolution of national fiscal resources to an administrative mechanism for fiscal administration and monitoring,” added Vijayan.